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Tax preparation and tax planning services are evolving as small business owners are turning to health care advisors and their tax professionals to learn how they may reduce their health care costs. As employers explore ways to reduce their health care costs, employees covered by those plans will be affected.

The Journal of Accountancy had an excellent article written on Feb. 4, 2014 by Ken Tysac that discusses how employers can possibly control their health care costs. Mr. Tysac hit the nail on the head when he cited industry experts who say that employers who consider cost-savings strategies must also evaluate their impact on various other factors, including employee morale, productivity, retention, and recruiting.

Our September 24, 2013 blog posting discussed the automatic tip charges that restaurants had to abide by effective January 1, 2014. Currently in the news are proposals to increase the minimum federal wage which would affect many in the hospitality industry. According to Yahoo Finance, a local Philadelphia restaurant chain, Chickie’s and Pete’s (C&P), ignored labor laws and will pay $8.5 million to its employees for failing to pay them the minimum wage as well as improperly keeping part of their employees’ tips. The U.S. Department of Labor (DOL) reported this as the largest wage-and-tip violation in its history. The restaurant chain separately announced that it would spend almost $1.7 million to settle private lawsuits with some of its employees. The DOL probe apparently took about a year which undoubtedly cost the company much in professional fees and lost time for the employees handling the audit.

Unfortunately, far too many taxpayers often “adopt” policies or procedures based on what their friends, neighbors, and business associates tell them Read more…

How many times has the executor of an estate say upon the death of a parent that an estate tax return was not required to be filed for the deceased parent because the value of the estate was less than the estate tax credit? Would the same conclusion had been reached if the executor had consulted with a tax professional regarding the estate tax preparation or tax planning services?

The estate of every decedent is allowed a credit (the “applicable credit amount”) in determining the amount of estate tax due. The applicable credit amount effectively acts to exclude a certain amount of property from the estate tax (the “applicable exclusion amount”). With proper planning, a married couple could take advantage of the applicable exclusion amount in each of their respective estates.

The 2010 Tax Relief Act introduced the concept of “portability” with respect to the unused portion of the applicable exclusion amount of a predeceased spouse, referred to as the deceased spousal unused exclusion (DSUE) amount. A “portability election” passes along a decedent’s unused estate and gift tax exclusion amount to a surviving spouse. The American Taxpayer Relief Act of 2012 then made portability permanent. How does the DSUE work? Read more…